New NARUC-DOE reports highlight economic implications of energy transition, means to negate fossil fuel retirement effects

Two reports issued by the National Association of Regulatory Utility Commissioners (NARUC) Center for Partnerships & Innovation (CPI) and the U.S. Department of Energy (DOE) Carbon Capture, Utilization and Storage Partnership showcases the potential economic impacts of the energy transition and how the effects of fossil fuel retirements could be mitigated.

“These complementary resources provide a holistic view of potential economic development considerations within commission decision-making, case study-style examples of concrete actions, and avenues for a range of support approaches for impacted communities,” CPI Director Danielle Sass Byrnett said. “As we observe more commissions thinking about incorporating energy equity and justice considerations into their decision-making, we expect these publications to be referenced frequently as foundational documents.”

According to the first report, “Regulators’ Energy Transition Primer: Economic Impacts on Coal-Producing Communities, Environmental Justice Considerations, and Implications on Clean Energy Jobs,” coal retirements are disproportionately affecting the socioeconomic health of communities where those old plants are located. Consequently, the authority and capability of many public utility commissions’ abilities to shield host communities are increasingly being questioned, and their approaches to preserving the public interest have varied state by state.

While noting this problematic quality, the report also discussed the environmental, climate, and energy justice considerations of further transition, along with the federal programs and funding currently available for affected communities.

A second report, “The Role of State Utility Regulators in a Just and Reasonable Energy Transition: Examining Regulatory Approaches to the Economic Impacts of Coal Retirements,” proceeded naturally from this, looking at the authority of various PUCs as it considered impacts other than direct ratepayer effects. It then summarized approaches that PUCs, utilities, and other stakeholders have successfully used to negate the worst economic impacts of coal retirements.

“We expect several coal plants will retire in Wisconsin over the coming decades, so this is a particularly salient topic,” Ellen Nowak, Wisconsin Public Service Commissioner and vice chair of NARUC’s Subcommittee on Clean Coal and Carbon Management, said. “This report illustrates how commissions can consider mechanisms such as securitization, stakeholder engagement, and collaboration with other local, state, and federal agencies to act in the public interest and play a role in relieving the economic burden of the retirements on energy workers and communities.”